The Importance of Data Breach Insurance
As more digital technologies are released into the mainstream, it is becoming increasingly complex to do business, and more specifically to manage the data that new technologies generate. In the security realm, it is no longer a case of safeguarding your physical premises and assets; you need to ensure your digital assets are secure too.
The threats to your data are real. According to the latest data breach statistics, 3543 data records are lost and stolen every minute. For businesses that collect and store personal data from their customers, there are even more risks to consider. Data such as social security numbers, credit card details and bank account information can prove invaluable to criminals, and they will stop at nothing to get their hands on this information. If they succeed in their mission, your customers could bring about liability proceedings, putting your reputation and your business in serious jeopardy.
Protecting It All With Data Breach Insurance
Data breach insurance, otherwise known as cyber liability insurance, is designed to protect against data security risks and the damage that can be associated with them, be it to your finances or your stature. Your level of cover will depend on the policy you have in place, but most products offer identity protection solutions, legal fees, public relations solutions and liability. If your business ever falls victim to a data breach, it is vital that you restore the public’s confidence as quickly as possible. Data breach insurance helps you to do that.
What Types of Data Breach Insurance Are Available?
Cyber risks usually fall into two categories; first-party exposure and third party exposure. First party exposure covers those risks that affect a business first-hand, while third-party exposure covers risks that could affect the data of third parties such as customers, clients or employees.
First party exposure insurance can protect against the following:
- Loss or damage to digital assets – this includes the loss or damage of software or data.
- Non-physical business interruption – if your business network suffers any interruption or service failure, this insurance will cover associated expenses incurred while investigating the interruption.
- Cyber extortion – if your organization falls victim to cyber extortion, where you receive threats from criminals to steal or damage data or restrict your network, your insurance company will handle the demand. This may involve payment of the extortion monies or criminal proceedings that bring the perpetrators to justice.
- Reputational damage – this level of insurance helps to protect you from damage to your reputation following a reported data protection breach. Depending on the level of cover, your organization could be paid for loss of income, loss of customers and the cost of PR exercises to repair your reputation.
Third-party exposure insurance typically protects against the following:
- Security and privacy liability – if a data security breach results in the theft or loss of third-party data, either client or customer, this insurance will cover defense and investigation costs as well as any civil damages you incur.
- Privacy regulation defense – if your organization is investigated by a regulator following any data breach, this insurance will cover your defense and investigation costs in addition to any fines where applicable.
- Customer care expenses – if you have a regulatory requirement to notify third parties about any data breach, this can often run into millions of dollars. This insurance will cover your notification expenses subject to the limit on your policy.
Don’t Leave Your Business or Your Data Exposed
Data breach insurance is designed to protect your data as well as privacy and network exposures. Whether it is a sensitive customer, employee or client data, there are increasing requirements for this data to be secure. By investing in comprehensive data breach insurance that is tailored to your business you can go on protecting what matters and give your customers total peace of mind.